Silver, a reinforced metal, like gold, in its function as a safe haven

2024-09-29 22:06:19

The rate cut announced by the Fed (the United States Federal Reserve) caused silver prices to rise. But the prices of the metal are also pushed up by the ever-increasing number of applications in industry.

Falling rates in the United States it didn’t just benefit gold. After the announcements of the US Federal Reserve (Fed) on September 18, investments in the dollar became less profitable and silver strengthened its function as a safe haven. Like gold, it saw its prices jump until returning last week to a level not reached since 2012: $32.71 an ounce.

With these latest increases, the white metal has gained 35% since the beginning of the year. Paradoxically, its current value could lead some investors to withdraw and resell their coins and bars. THE Silver Institute it also plans a 13% disinvestment in 2024.

Growing industrial needs

The metal, which will no longer be accumulated, will then be reintroduced into the circuit and will help meet the growing demand of the sector. Silver is increasingly used by the photovoltaic sector: last year almost 20% of industrial demand was dedicated to the construction of solar collectors, slightly less than what was absorbed by jewellery, another key sector for revenue. But in 2024 this will no longer be the case. Photovoltaics will come first. According to the Silver Institute, this is the application that should record the strongest growth of the year (+20%). Growth in this area had already been, in 2023, higher than forecast.

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Fundamentals that do not explain prices

This year, mineral supply plus quantities of recycled white metal may not be enough to meet producers’ needs. But roughlythe market has been in equilibrium for several years. Fundamentals, which refer to supply and demand, do not justify large price changes.

What unbalances the market and prices is therefore essentially the evolution of investment demand, explains Didier Julienne, president of Commodities & Resources. A question that largely depends on the ups and downs of the global economy.

Read alsoGold soared amid a sharp decline in US rates